Panama trip update July 2017

I was in Panama the week of July 17, following the passing of one of our land lease partners Juan Cruz. My main goal was to make sure the new owner of the land, Juan's widow Rosa, is still on board with the project, and make any administrative changes necessary to ensure a smooth transition. I also had a chance to check in on all the operations and meet up with our operations director Francisco.

Though sad, Juan's passing was not surprising. He was in his 80's and had heart problems ever since before I knew him 10+ years ago. From what Rosa explained, he was often stubborn about going to his medical appointments, and had other medical problems in addition to his heart. As one of the founders of Nuevo Paraiso, he will be missed by his numerous children and grandchildren.

Before he died Juan divided his land holdings between Rosa and his two sons. Our five-hectare lease sits within Rosa's land, and she is keen to continue working with us and receive land lease payments. We set up a new cooperative account in the name of Rosa and her daughter Mygdaliz to receive the lease payments. Mygdaliz lives in Panama City and therefore is easier to get in touch with. Strategically, maintaining this relationship is important because we expect Rosa will eventually pass the land to Mygdaliz.  

This was the first time we've dealt with a change in land owner, and it seems to be going smoothly.  

Last dry season we suffered a fire in Juan's (now Rosa's) finca. The fire came in through a narrow swath running along the river, where we didn't expect anyone to be burning. Usually, the danger comes from people burning in their adjacent fields in preparation for the planting season. The fire burned away the crowns of the native species and caused the bark on the trees to crack. Lacking bark coverage, the trees are susceptible to fungus and insect attacks and most won't survive. The good news is that the teak resisted the fire a lot better than the native species. We will let the affected native species trees die off naturally and focus on maximizing the production of the other blocks of trees.

In Chico's finca (the one planted in 2007), the blocks of teak are looking good and will be thinned out in the next couple of months. We have been on the lookout for a buyer for the teak, but so far have not had any luck. We have a block of mahogany growing very well, and some of these trees will be thinned to create space for the larger ones. Our operations manager Francisco wants to experiment with a technique called tree-topping instead of clear cutting the trees marked for removal. This would leave the trees standing, but remove their crown to reduce sunlight competition. Theoretically, the trees would no longer grow upwards, but would rather increase in girth and therefore can be left to harvest for later.

Jose "Ino", who used to work for us on a permanent basis in Nuevo Paraiso, is doing well, and his wife Esther just had their 4th child (he says this will be the last one). Ino has been a dependable talent for us, and we expect to work with him on the thinning of the Nuevo Paraiso plantations.

In Arimae, I walked through fincas 1-3 with our point of contact Yem. Fincas #1-2 have been thinned. We left the native trees to decompose on the forest floor and stockpiled the teak in case we find a buyer. We noticed that the cedro amargo trees (cedrela odorata) have been growing strongly here. The teak trees are on the whole looking good, with the largest ones exceeding 12" in diameter. They need to be de-branched (podar) to make sure the wood they eventually yield is knot-free.

The teak that I saw in the #3 finca is looking very good - tall, straight, and little bifurcation. These also need to be de-branched, and could even be thinned. Planted in 2012, this teak will eventually surpass our teak planted in 2007-2008, a testament to the importance of weed suppression early on. We took the motorized branch trimmer (it's a chainsaw on a pole) to be repaired, and rigged up another manual tree trimmer with an aftermarket saw blade. So, now we have two functioning branch trimmers ready to go.

Meanwhile, the roads and infrastructure is improving in the Darien. The Ministerio de Obras Publicas has been re-paving the roads and is actually installing guardrails along some stretches, and soon there will be legitimate bridges over the rivers in the Nuevo Paraiso area.

Tree nurseries in Panama - our experience

Women sorting saplings for the 2012 planting in Arimae

Women sorting saplings for the 2012 planting in Arimae

We recently read about a new 1 million unit tree nursery the Panamanian government set up to provide seedlings for the reforestation of the Azuero province. The nursery is part of a pledge announced last year by MiAmbiente to reforest 1 million hectares of land in Panama.

The lack of details in the article open up broader questions about how Panamanian government is executing on its pledge, but we are most interested in who will be buying the seedlings, where they will be planted, and how they will be cared for.

We had the opportunity a few years ago to set up and manage a 6,000 seedling nursery with our community partners in Arimae, and learned a few things that might offer context on this effort.

  1. There is low demand from the ranchers and farmers for the seedlings - even if given away for free.

  2. Most Panamanian farmers/ranchers are familiar with a number of native species and are adept at collecting and growing seedlings by themselves.

  3. There are a number of commercial nurseries that can produce significant amounts of seedlings for reforestation - even native species.

  4. Nurseries can be expensive to sustain and haven’t had great success in being run by the Panamanian government.

The first year of our nursery was successful because the nursery had a committed buyer: Planting Empowerment purchased the majority of the seedlings and the community used the rest for a community rosewood (cocobolo) plantation. Sources of seeds for the nursery were scouted by our forest technician at the time - Jose Deago - who happened to be Panama’s leading expert on the topic.

The first year was also the nursery’s best year. The next year, production fell by half after we adjusted down our planting. Additional buyers for the seedlings were non-existent, even though the seedlings were high quality, adapted to local conditions (local seed sourced) and produced using the tray/tube system instead of the heavier plastic bags. Community members were interested in free seedlings, but not willing to pay the $.50/seedling costs to make the nursery sustainable. The community dismantled the nursery in the 3rd year.

Our other experiences with tree nurseries demonstrate that it’s a tough business and you really have to know what quality you’re going to get. For one of our first farms planted in 2008 we sourced some of the seedlings from a government nursery. About half of seedlings were high quality, but the rest were unusable because they were at least a year old and too mature to be planted out. For subsequent plantings, we purchased seedlings from some of the many commercial nurseries that supply the large plantation companies and the nursery at the Smithsonian Tropical Research Institute (which has subsequently closed, too).

We wish this new project by the government success because Panama needs reforestation and nurseries will need to produce the seedlings for a portion of this. We are also supportive of the native species focus of the reforestation effort. However, we hope the government might learn from past initiatives, and Planting Empowerment’s experiences, in order to make their investments in reforestation more economically viable.

Wood products investigation - what we learned

The backstory

In the fall of 2014 we helped our partner community Arimae thin out its own reforestation project. The stand had not been properly thinned since it was established about 17 years ago, and the overcrowding was preventing development of the more viable trees.

While we wanted to help the community improve its own forestry projects—which will in turn yield more profit for the community down the road—we also wanted the experience of managing a thinning, called raleo in Spanish. With our earliest investor-owned forests approaching eight years, they would soon need their own raleo, and working with the community's project was a low-risk way to cut our teeth. We held numerous meetings with the community, and completed a profit sharing agreement that would compensate them once we sold the wood to a buyer. 

The raleo

Over the course of a few months beginning in late 2014, our field team of laborers and our foreman felled the smaller trees, aggregated them into pickup points and hauled them to the road using horses, tractors, and their own manpower. From there they loaded them into trucks and carted them a couple miles down the road to a storage facility. 

Workers Load a Spanish Cedar Log into the truck.

Workers Load a Spanish Cedar Log into the truck.

We expected to quickly find a buyer for the roughly 10,000 board feet of mahogany, spanish cedar and spanish oak on our hands. But with the market saturated with cheap, illegally harvested timber from the Darien, we found low demand for our smaller-diameter timber. Initially, we worked with a small indigenous organization who was exporting logs on behalf of the nearby indigenous reservations. Soon after we started working with them, they closed and we then worked with local connections and posted ads in local publications to gin up leads. At the same time, we pursued leads with our own international contacts to export the timber after necessary processing in Panama. All of these efforts failed to generate an economically viable and real sale of the timber.

Taking matters into our own hands

Sitting on the wood for 9 months was frustrating because we were paying to store the wood, and the community wanted their share of the profit that we anticipated turning on the wood. With no guarantee that we would be able to sell the wood anytime soon, we bought out the community's stake, making us the full owners of the logs. 

Logs delivered to the holding location

Logs delivered to the holding location

To get the most value from the raw logs we now owned, we would have to invest in processing the logs into lumber, and then process them further into finished products. Then, we'd have to get those products to market. In other words, we'd need to participate in each step in the value chain: milling, drying, processing, transporting, designing, manufacturing, exporting and marketing finished products. 

Could we evolve from a forestry project developer into a company selling consumer products with a sexy story?

Researching options for production in Panama

In October 2015 I, along with our field supervisor Francisco and field coordinator Yem, visited numerous woodshops in the Darién to pose the idea of making wooden products for us on contract. Of the roughly ten we visited, we deemed that a couple of them had the right equipment, organization and level of interest to work. We promised to come back to them with more detailed design parameters and instructions. Knowing that there was an opportunity to work with local labor, and for a reasonable price, was a good first step. 

What are the most popular products?

But we also wanted to know what the potential demand for the products might be. In November 2015 we published a voting page on our website, displaying wooden products representative of those we could potentially make with the logs. We attempted to post products that were diverse, but also that could be realistically made given the limitations of the log dimensions and the current work being produced by the woodshops in Panama. We asked people to vote on their favorites to gauge which would be the most likely to sell if we were to make them. After several weeks of voting, we knew the favorites: cheese boards, candle holders and coasters. 

While understanding the demand for these existing products was useful, we would also be competing with all the other cheese boards, candle holders and coasters out there. 

New ideas with product designers

To explore new product concepts, I conducted a five-week project with seven product design students (juniors and seniors) and my former design professor at Virginia Tech. The goal was to generate new product ideas based on the characteristics of the wood in Panama, and the Panamanian woodworkers’ existing equipment and working style. Students began with loose concept sketches, refined them based on feedback, and eventually produced prototypes of their products. Here are some of their ideas.

The sale happened after all

And this is as far as we got. As we continued testing the waters for finished products strategy, we finally found someone interested in buying the raw wood. We debated about keeping the wood and continuing to push on the products strategy, but ultimately decided that selling the wood and cutting our losses made more sense than investing in the daunting process of launching a wooden products line.

We appreciate everyone who participated in our products survey on our website, the Virginia Tech design students who worked with me on new product concepts, and the woodworkers in Panama for their willingness to hear our ideas. 

Arimae finally gains legal title to its land

Arimae receives its land title during a ceremony in the community. Photo courtesy of El Siglo.

Arimae receives its land title during a ceremony in the community. Photo courtesy of El Siglo.

After a long struggle, our partner community Arimae finally received its land title from the government of Panama. We’ve been working with Arimae since 2007 and currently have 15 hectares of timber plantations on their land.

The biggest benefit to having a land title is that now the community doesn’t have to enter into judicial processes every time it wants to expel squatters from their territory. Defending their territory from squatters has always been difficult because the Pan-American highway cuts through the middle of it, allowing for easy access. The land title covers more than 20,000 acres, more than half of it forested.

One of our founders, Damion Croston, lived in Arimae between 2004-2006 and learned firsthand about its struggles over the decades to secure its land title. Subsequently, our land lease payments helped to support the community financially by covering the costs of many trips by leaders to government offices and legal fees. However, our contribution was minor compared to the time and financial resources the community’s leaders and members invested to secure their title.  

Colleagues at the Rainforest Foundation US who provided support to the community during their struggle posted this blog about the formal ceremony the community held when they received the official title from the government.

We congratulate Arimae on their success, and are happy that they can now focus their time and resources on strengthening their community culturally and economically.

Read more about the story (in Spanish) on Panamá’s El Siglo website.

Launching wooden product line - Vote your favorites

Today we kicked off the first stage of a campaign to offer finished wooden products, and we're starting by asking you which are your favorites. We'll move forward with the products that are the most popular.

The "voting" stage is the first phase of a broader campaign,  whose eventual goal is to provide people in the U.S. handcrafted wooden items for the home, made by talented Panamanian woodworkers. By employing Panamanian woodworkers to create the products--instead of shipping the raw lumber to the U.S.--more of the value of these precious woods stays in the Darien.

Most of the wood that leaves the Darien--one of the few remaining biodiversity hotspots in Central America--ends up going straight into Panama City, with minimal processing, and minimal benefit to the local economy. If we can succeed in connecting consumers with woodshops in Panama, then more of the value of these beautiful woods stays in local communities.

The indigenous Emera and Wounaan communities safeguard some of the last remaining stocks of the coveted cocobolo wood (dalbergia retusa). The trees are culturally and economically important for these groups because they provide the wood for their incredible carvings. Unfortunately, cocobolo trees are increasingly poached by opportunistic loggers and settlers, depriving the communities of a valuable resource. If we succeed in stimulating the demand for their carvings, then perhaps the communities will invest more in their traditional artistry and redouble their efforts to protect their cocobolo stocks .